Partial FDI opening in e-commerce “almost worse” than no opening: Competere chief
Trade policy experts argue that India's partial relaxation of FDI rules for e-commerce is counterproductive and potentially more harmful than a total ban. The Competere Foundation suggests that selecting specific business models for investment creates market distortions that cost the Indian economy billions.
Why it matters
It addresses the economic impact of regulatory policy on foreign investment and market competition in emerging economies.
India’s partial opening up of foreign direct investment (FDI) rules in the e-commerce sector could be “almost worse” for competition than maintaining an outright ban on FDI, according to Shanker Singham, President and Chairman of the Competere Foundation for Trade and Competition Policy.
In July 2025, the government relaxed its FDI rules, allowing foreign investment in e-commerce companies that hold their own inventory, provided that it is intended solely for export. Previously, FDI was prohibited in e-commerce companies that maintained their own inventory.
“The concern about the FDI restriction on the type of model you use to invest in India with regard to e-commerce is that you’re determining a particular model and allowing certain firms that don’t have that model not to benefit from the easement to the restriction and other firms that do have that model to benefit from it,” Mr. Singham told The Hindu in an interview.
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